Govt moots UID-enabled bank accounts for the poor

Observing that with Unique ID initiative gathering pace and pilot roll-out on anvil, the Centre has said a customer can access their UBEA through a banking correspondent (BC) operating handheld microATM device.

Official sources told Deccan Herald that UBEA will provide four basic banking features: a convenient store of cash for savings, facility for making electronic deposits and withdrawals, make payments and fast-track channel for sending and receiving remittances, besides balance queries and history of transactions.
Stating that Reserve Bank of India has been asked to amend the rules so that UID is sufficient to get no-frills UID-enabled bank account, sources said this activity could be co-ordinated for pro-poor products across all regulators such as RBI, PFRDA, Irda, Sebi.

Pointing out that UBEA will ensure delivery of benefits and subsidies through single channel that is faster, convenient and transparent enabling inkdividuals to send and receive remittances cheaper, faster, more secure in small amounts.

Initial deposit
Sources said, a UBEA may include small, initial deposit from the government to resident as an added incentive to sign up for UID. This, they noted, would establish residents financial history to banks and agencies, regardless of where they live. Suggesting that commission of 2 per cent of all cash withdrawals could be provided for BCs as commission.  Banks can team up with FMCG firms, telcos and others with retail networks to provide logistics support to BCs.

Elucidating that UID’s clear authentication and verification will allow banks to network with village-based BCs, they said, it will allow banks to verify poor residents both in person and remotely and UID-enabled micropayments solution mooted is just one of many applications of UID number.

Observing that an estimated 60,000 villages with population of 2,000 and above have no banking facilities, sources said, despite network of over 82,000 bank branches of commercial banks across the country, they cater to only about 5 per cent of villages. In this perspective UBEA is a novel way to spread banking to unbanked areas.
DH News Service